Business

Luxury car duties first to go under TPP

Import duties on luxury cars with an engine capacity of over 3 liters will come down to zero ten years after the TPP takes effect, with duties on other motor cars to come down to zero three years later, the Ministry of Finance (MoF) told local media on November 9.

According to Mr. Ha Duy Tung, Deputy Director of the Department of International Cooperation at MoF, it was necessary during negotiations to build a reasonable roadmap for goods that need to be protected, which includes domestically-produced motor vehicles. Vietnam is unable to produces motor cars with an engine capacity greater than 3 liters so duties will therefore be removed sooner.

The lifting of duties will be implemented on new cars but do not apply to second-hand imported cars. Mr. Tung said that second-hand cars are not a recommended item so should be limited by quotas. The initial quota for second-hand car imports is 66 units in the first year after the TPP takes effect and will gradually increase to 150 units over the next 16 years.

Mr. Vu Nhu Thang, Director of the International Cooperation Department, said that tax adjustments are not targeted at raising revenue for the State budget but to implement the development strategy of the domestic automobile industry.

He added that member countries are now in the process of finalizing procedures for ratifying the TPP, with implementation expected in 2018.